- Wall Street indices closed yesterday's session near record highs. The Dow Jones rose nearly 1.9% and, supported by United Health Group's nearly 6.5% rally after its quarterly results, climbed to new historic highs; the Russell 2000 gained 3.5%, extending an upward streak during which it has with it a nearly 12% gain over the past five sessions
- Markets are supported by the increasing likelihood of a September Fed rate cut, which the market is now pricing in a near 100% probability. Yesterday's slightly stronger-than-forecast retail sales data was read by the market as a sign of a possible soft landing, rather than a signal that would stop the Federal Reserve from easing policy
- Sentiment in European markets is slightly weaker, likely influenced by rather hawkish comments from Trump's environment and the selection of J.D. Vence as a potential future U.S. vice president.
- The hawkish comments mainly concern China and suggest 'letting go' of the issue of defense funding for Ukraine, which may herald a change in the balance of power on the Old Continent. Trump announced yesterday that he would cut corporate tax to 15%; sale of U.S. Steel, to Japan, is in question
- Despite the second day of the Chinese Communist Party leadership plenum, volatility in the Chinese stock market remains subdued; the Hang Seng Index rose just 0.2% today
- The MSCI Asia Pacific Index reversed a three-day streak of declines, following yesterday's rally in the US. However, Japanese indices posted declines in the 0.4-0.5% range; South Korea's KOSPI also lost. Australia's ASX climbed to new historic highs, gaining almost 1% yesterday
- Gold is still near historic maximums, although silver is losing almost 0.9%. EURUSD remains above the 1.09 level. 10-year US bond yields are trading near 4.17%
- European index futures DAX, FTSE or CAC40 are trading mostly lower ehead of European semiconductor giant, ASML earnings (before the market open). Markets await for Q2 earnings of US companies today: Johnson & Johnson, Prologis and Northern Trust (before the market open); Alcoa, Ally, Kinder Morgan Steel Dynamics and US Bancorp (after-session)
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